BIR Ruling

February 27, 1970 Mr. Roman O. Ibay Executive Officer Office of Fiscal Affairs Department of Foreign Affairs Manila S i r : This refers to you letter dated February 6, 1970 requesting information on the following: "For returning resident physicians who have stayed in the USA for over seven (7) years under the Exchange Visitors Program. "(a) Are they entitled to exemptions from the payment of duties and taxes up to a certain amount of the total assessed value of the used equipment, and personal and household effects they will bring home. Some people say they are entitled to P10,000.00 of the assessed value as tax exempt. cdt "If this is true what kind of equipment and effects could be among the tax exempt items? "(b) If husband and wife are both physicians, is each individual entitled to separate tax exemptions? "(c) If they bring home their car, a Mercedes Benz 200, Model 1967, how much duties and taxes shall they pay? "(d) Shall they be required to make special time deposit for the release of their car and personal and household effects?" In reply, I have the honor to inform you that under Section 190(e) of the Tax Code, as amended by Republic Act No. 4103, returning residents are exempt from the payment of compensating tax on personal and household effects purchased in foreign countries and brought into the Philippines, which effects have been used abroad, neither imported for the account of any other person nor intended for barter, sale or hire and accompanying them upon their return to the Philippines or arriving within ninety days before or after their return, the export value of which does not exceed the amount of: P1,500 when the sojourn is not less than three months; P2,500 when the sojourn is not less than six months; or P3,000 when the sojourn is not less than one year. Additional exemption shall be granted for books, professional instruments and implements belonging to Filipino professionals, students and grantees of fellowships and scholarships returning to the Philippines from training, studies and/or employment abroad, the export value of which does not exceed the amount of one thousand pesos: Provided , That an additional exemption shall be granted to returning Filipino Doctors of Medicine and Dentistry and other scientists for professional instruments and implements related to their particular field of specialization as attested to by the respective institutions of training, studies and/or employment, the export value of which does not exceed three thousand pesos: Provided, further , That returning Filipino professionals, students and grantees of fellowships and scholarships, shall present to the Commissioner of Internal Revenue a certificate issued by the schools they have attended: Provided, finally , That such returning residents shall not have previously received the benefits herein granted within one hundred and eighty days immediately preceding their arrival. cdti Husband and wife who are both physicians are entitled to the foregoing exemptions individually. However, the above exemption does not apply to their Mercedes Benz car. And if they bring home said car, the same shall be subject to the compensating tax imposed in Section 190 in relation to Section 184(a), both of the Tax Code, as amended by Republic Act No. 6110. The amount of compensating tax due on the car can only be ascertained after the landed cost thereof has been determined by the Bureau of Customs. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue